Directorate of Enforcement Vs P Kishore (Supreme Court)
Date-31st October 2022
Sub-Whether handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime for being tried under Prevention of Money Laundering Act(PMLA)

The Supreme Court in this case was considering SLP of enforcement directorate in relation to a matter when a sum of Rs 50 Lacs was found in the car belonging to one Additional Commissioner of Income-tax Chennai which was parked in front of house of the said ACIT. It was found that the said amount was handed over to the ACIT by the Respondent for getting certain favours in relation to income-tax matters. On these facts when the respondent was acquitted by Madras High Court on the pretext that when the said amount of Rs 50 lacs was lying with the respondent, it could not be said to be a tainted money and thus no offence under PMLA was committed unless the ED projected that the said amount was acquired as a result of Criminal activity. However, the Supreme Court allowing the SLP of ED held that it is true that so long as the amount is in the hands of a bribe giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money. If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over. By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime and thus liable under PMLA.

Thus, when bribe is given, the bribe giver can be tried under the PMLA Act though it can be argued that there was no intent of giving bribe and it was only an entrustment of money.

Ramesh Patodia
01-11-2022